For use only with Perreault and McCarthy texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER SIXTEEN CHAPTER SIXTEEN Advertising and Sales Promotion

1.Understand why a marketing manager sets specific objectives to guide the advertising effort. 2.Understand when the various kinds of advertising are needed. 3.Understand how to choose the “best” medium. 4.Understand the main ways that advertising on the Internet differs from advertising in other media. © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When we finish this lecture you should

5.Understand how to plan the "best" message—that is, the copy thrust. 6.Understand what advertising agencies do—and how they are paid. 7.Understand how to advertise legally. 8.Understand the importance and nature of sales promotion. 9.Know the advantages and limitations of different types of sales promotion. © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When we finish this lecture you should

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising, Sales Promotion, and Marketing Strategy Decisions Exhibit 16-1

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Decision to Position a New Product

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin International Dimensions Are Important +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising Spending as Percent of Sales for Illustrative Product Categories Exhibit 16-2a +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Retail Ad Spending Exhibit 16-2b +

Introduce New Products Position Brands Obtain Outlets Ongoing Contact Support Sales Force Get Immediate Action Maintain Relationships Obtain Outlets Ongoing Contact Support Sales Force Get Immediate Action © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Setting Ad Objectives Is a Strategy Decision AdvertisingObjectives Should be Specific

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What’s the Advertising Objective?

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Objectives Guide Implementation Exhibit 16-3

Institutional Advertising Pioneering Advertising Product Advertising Competitive Advertising Reminder Advertising Direct Indirect Comparative © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Objectives Determine the Kinds of Advertising Advertising Objectives Advertising Objectives

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Competitive Advertising Emphasizes Selective Demand +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A Competitive Ad That’s Comparative +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Reminder Advertising Reinforces a Favorable Relationship +

Sheds Favorable Light Connects Divisions of a Company Institutional Advertising – Remember Our Name Advocates Causes and Ideas © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Interactive Exercise: Types of Advertising

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Coordinating Advertising Efforts with Cooperative Relationships Integrated Communications Integrated Communications Integrated Communications Integrated Communications Cooperative Advertising Cooperative Advertising Cooperative Advertising Cooperative Advertising Allowances Advertising Allowances Advertising Allowances Advertising Allowances Key Issues Key Issues Vertical Cooperation Vertical Cooperation Vertical Cooperation Vertical Cooperation Ethical Concerns

Funds Available Target Market Characteristics Promotion Objectives © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Choosing the “Best” Medium – How to Deliver the Message Nature of the Media

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Comparing Advertising Media Exhibit

Specialized Media Are Gaining Specialized Media Are Gaining Specialized Media Are Gaining Specialized Media Are Gaining Traditional Media Are More Focused Traditional Media Are More Focused Traditional Media Are More Focused Traditional Media Are More Focused Direct Mail Has Grown Direct Mail Has Grown Key Issues Key Issues Direct Mail Has Grown Direct Mail Has Grown © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An Emphasis on Targeting “Must Buys” May Use Up Funds “Must Buys” May Use Up Funds

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: Promotion Planning

Many Consumers Don’t Respond Many Consumers Don’t Respond Direct Response Desired Direct Response Desired Some Sites Offer More Exposure Some Sites Offer More Exposure Some Sites Offer Better Targeting Some Sites Offer Better Targeting Context Ads Pointcasting Viewers Can Get Benefits Viewers Can Get Benefits Pay for Performance Pay for Performance Taking Hold Direct Response Desired Direct Response Desired Many Consumers Don’t Respond Many Consumers Don’t Respond Some Sites Offer More Exposure Some Sites Offer More Exposure Some Sites Offer Better Targeting Some Sites Offer Better Targeting Pointcasting Viewers Can Get Benefits Viewers Can Get Benefits Context Ads Key Issues Key Issues © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising on the Internet

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Planning the Best Message – Getting Attention +

Get Attention Hold Interest Arouse Desire Obtain Action Get Attention Hold Interest Arouse Desire Obtain Action Interest, Desire and Action © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Can Global Messages Work?

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A Unique Selling Proposition

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Advertising Agencies Often Do the Work Exhibit

Hindsight May Lead to Foresight Research and Testing May Improve Odds Consider the Total Mix Measuring Advertising Effectiveness Is Not Easy © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Standards Are Changing Standards Are Changing Standards Are Changing Standards Are Changing Government May Say What’s Fair Government May Say What’s Fair Government May Say What’s Fair FTC Controls Unfair Practices FTC Controls Unfair Practices FTC Controls Unfair Practices FTC Controls Unfair Practices © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How to Avoid Unfair Advertising Support for Claims Is Fuzzy Support for Claims Is Fuzzy

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Promotion: Do Something Different to Stimulate Change Exhibit 16-6a +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Promotion: Do Something Different to Stimulate Change Exhibit 16-6b +

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sales Promotion: Do Something Different to Stimulate Change Exhibit 16-6c +

Hard to Manage Erodes Brand Loyalty Need For Alternatives Erodes Brand Loyalty Need For Alternatives Problems in Managing Sales Promotion © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Not For Amateurs Key Problems

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Different Types of Sales Promotion for Different Targets +

Product advertising Institutional advertising Pioneering advertising Competitive advertising Direct type advertising Indirect type advertising Comparative advertising © 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Key Terms Reminder advertising Advertising allowances Cooperative advertising Copy thrust Advertising agencies Corrective advertising